Business

Ads Will Soon Follow You From One Device to the Next

Kamakshi Sivaramakrishnan calls herself an “advertising quant.” Most people with a PhD in her field of information theory are recruited onto Wall Street if they decide to leave the halls of academia, she says.

She chose to go into advertising instead, and, with her startup, Drawbridge, is applying her expertise to a problem central to the bottom line of a wide swath of digital companies: how to make advertising pay as audiences move over to mobile devices. Founded in 2010, Drawbridge is using statistical methods that rely on anonymous data to track people as they move between their smartphones, tablets and PCs.

The company’s technology has attracted attention both because of its high-profile backers—Kleiner Perkins Caufield & Byers and Sequoia Capital, two top Silicon Valley funders, have invested $6.5 million—and because it claims its approach will protect an individual’s privacy while also filling an important gap in the still-nascent mobile advertising technology market.

“Retargeting is a powerful strategy on the web, and we are bridging that to mobile devices as well,” Sivaramakrishnan says. For example, Drawbridge might know that I visited a retailer’s site on my home computer, and show me an advertisement on my smartphone at work the next day. Drawbridge says it has matched more than 200 million devices so far to create anonymous user profiles. These profiles, Sivaramakrishnan says, allow it to buy ads for customers such as travel websites and online retailers and improve their investment return by two to three times. The company is also using these methods to help mobile app makers recruit users who are more likely to stick with their software.

Today, a number of startups are working on improved tracking of people tied to particular devices, and, as Drawbridge is now doing, across different computers they regularly use.

Such companies are pursuing a huge market opportunity, largely because the advertising industry has not kept pace with the speed at which people have migrated to on-the-go computing. According to a recent report from venture capitalist Mary Meeker of Kleiner Perkins Caufield & Byers, for example, only 1%of U.S. advertising dollars in 2011 were spent on mobile devices, even though these devices account for an average of 10% of people’s media consumption time.

One problem is that advertisers are skeptical about the effectiveness of mobile ads, a question now plaguing practically every web company that makes its money by selling advertising. Sivaramakrishnan, who previously worked for the mobile ad network AdMob and then at Google after it was acquired by the search giant, believes that mobile ad targeting technology has not evolved quickly enough—she left Google in 2010 frustrated by the slow pace even there.

Drawbridge works by looking at the cookie data that comes with a request from a mobile or desktop browser or app to an ad exchange, and using its “bridging” algorithm to assess the probability that any two arbitrary cookies from different devices are associated with the same person. The web cookies that Drawbridge uses contain anonymous, relatively benign information, such as the browser client, the site accessed, and a time stamp. Unlike a method known as device fingerprinting, Drawbridge doesn’t rely on technologies that directly track user activity, or report geolocation or other invasive device identifiers, Sivaramakrishnan says.

“We are triangulating the user’s behavior,” says Sivaramakrishnan. “As we observe the user, we are able to hone in.” Once they reach a threshold of certainty that two cookies represent the same person, they call it a match.

A 23-person company that has recruited other executives from Google and Yahoo, Drawbridge is growing quickly, and recently released its first product out of a beta testing stage. Sivaramakrishnan won’t name customers but says her company is already working with five of the top 10 mobile game makers, and three of the top five online travel agencies.

Eric Picard, CEO of the startup Rare Crowds and a former advertising technology strategist at Microsoft, says Drawbridge’s technology is a promising approach that addresses a current need for a large-scale platform that effectively tracks people across devices. However, he is skeptical of claims that user profiles are truly anonymous, even if they aren’t tied to personal information, such as names or e-mail addresses. As more and more data about people goes online, identities can increasingly be reverse-engineered, he says.

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